VET-FEE HELP: AIPE goes into liquidation days after federal government crackdown

One of Australia's largest private colleges has gone into voluntary administration leaving up to 16,000 students in limbo, just two days after the federal government announced it would put an end to the scandal-ridden VET-FEE HELP scheme.

The Australian Institute of Professional Education took in $110 million in public funding in 2014, enrolling 8000 students that year while graduating only 117 of them – at a cost of close to $1 million per diploma.

On Friday, AIPE announced it had appointed insolvency firm Ferrier Hodgson as administrators, becoming the first college to go into liquidation in the wake of the government's crackdown on the industry this week.

Former students said they were not surprised by the company's demise after being frustrated by the lack of communication for months.

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Australian Institute of Professional Education college was paid up to $1 million per graduate last year.Credit:Wolter Peeters

"Yeah good, they deserve everything they get," said Matt Reynolds, who was signed up for a diploma of business management worth tens of thousands of dollars.

AIPE rose from a one-bedroom flat in Glebe in Sydney's inner-west to a tower office block in the Sydney CBD in the space of six years.

It was run by Sydney radiologist Tej Dugal, a graduate from the University of Sydney and former doctor at Royal North Shore Hospital, as well as Ajay Vanju, a real estate mogul who now owns more than 30 Sydney properties.

At its head was CEO Amjad Khanche, a finalist in two NSW Premier's Awards for business.

Its rapid growth was slowed earlier this year after the ACCC launched action against the college for "unconscionable conduct".

Helen Fielding (left) was recruited by Australian Institute of Professional Education.Credit:Marina Neil

Fairfax Media revealed in December that AIPE had targeted barely literate students in some of the country's poorest communities to sign them up to diplomas for $20,000 worth of debt in exchange for a free laptop.

One of them, Helen Fielding, who grew up in foster care and suffers from an intellectual disability, said her responses to a mandatory test were forged by salespeople who signed her up to a $19,600 diploma of human resource management outside her housing commission flat in Newcastle.

The college has repeatedly denied any wrongdoing and laid the blame on unscrupulous third-party sales agents.

Ferrier Hodgson and AIPE have been contacted for comment on the college's move into voluntary administration.

On Friday, Senator Birmingham said the situation facing AIPE highlights the importance of announcement of the new VET Student Loans program.

"[There are] a range of new measures that include higher barriers to entry for providers and that will raise the quality of training organisations across Australia," he said.

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Up to 16,000 students could now be absorbed into an industry struggling to come to grips with the government's wave of changes.

On Friday, Australian Council for Private Education and Training CEO Rod Camm confirmed to Senator Birmingham that the councils would be seeking to place all of AIPE's continuing students in ongoing studies at alternative providers.